• Key point. Vacant, church—owned land that is acquired for future development is not exempt from property taxes in some states.

The Utah Supreme Court ruled that a parcel of vacant land purchased by a church was not exempt from property taxes despite the church’s use of the land for occasional worship services. The land was purchased as a site for a new church building. The church maintained the land but did not begin construction of a new church building. However, the church did use the property for religious purposes. For approximately two hours each year the church held religious services on the property. The church sought to have the land exempted from property taxes, but its application was denied on the ground that the church’s use of the property for religious purposes as insignificant and “insufficient to qualify the property for exemption.” The church appealed to the state supreme court. The supreme court noted that state law exempts from property taxes “property used exclusively for religious purposes.” It concluded that the land in question failed this test. It insisted that in order for land to be “used exclusively” for religious purposes it must be “actually used or committed to a use that is exclusively religious.” The church argued that the land was used exclusively for religious purposes even though it was used for religious services for only a few hours each year, since “for 8,758 hours out of the year the land is committed to no use at all.” The court disagreed, noting that “property held for future development is being used.” The court did concede that the property would be exempt once the church began construction since “construction of a church on church—owned property indicates that the property is irrevocably committed to a religious use, not simply held for future development.” Corporation of the Episcopal Church v. Utah State Tax Commission, 919 P.2d 556 (Utah 1996). [ State Property Taxes]

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